Heathrow Terminal 5 - Project Analysis - Case Study Example

Project Analysis Report: Heathrow Terminal 5 Introduction to the project Heathrow Terminal 5 (T5) is a project that involved the construction of an airport terminal that would serve all British Airways’ (BA) domestic and international passengers at Heathrow (Davies, Dodson & Gann, 2009, p. 14). The aim of the project was to increase the terminal’s capacity to serve many passengers (currently it has an annual capacity of 30 million passengers) and to make it compatible with the world’s largest aircraft, the Airbus A380. T5 is a large structure on a site of 260 hectares and comprises a large four-storey terminal building referred to as Concourse A and a satellite building referred to as Concourse B, which is a linked to the building by an underground people mover transit system, as well as 62 aircraft stands (Davies, Dodson & Gann, 2009, p. 14). The project also comprised rails, tunnels other infrastructure and systems such as a car park, a hotel and an air traffic control tower (Imperial College London Business School, 2009, p. 1). Completed at a cost of £4.3 billion, T5 was one of the largest projects in Europe, and though technical hitches occurred during the launch of the completed project, T5 remains one of the most successful megaprojects in the world (Health and Safety Executive, 2005, p. 1; Imperial College London Business School, 2009, p. 1). As mentioned earlier, the objectives of the T5 project were to increase the capacity at Heathrow by 30 million passengers per annum and to offer a quality gateway to the airport. Ideally, the project’s owner, the British Airports Authority (BAA), set some requirements that would be delivered by the project including becoming operationally efficient and delivering a prescribed rate of return, safeguarding for flexibility and maximising future development potential; and ensuring that the project was delivered at cost and time levels that had never been previously achieved for a project of such magnitude. That is, BAA wanted the project delivered within the stipulated timelines and at the projected cost (Turner & Townsend, 2011). Project stakeholder analysis The success of T5 can be attributed to the attributes of the stakeholders involved. BAA adopted an entirely different way of working that focused on proactive collaboration with its contractors. While many infrastructure projects are famous for late completion and enormous budget overruns, BAA avoided this fate by taking an innovative approach to project management. Essentially, the company collaborated with many contractors from the outset to ensure that work was completed on time and within the budget (Imperial College London Business School, 2009, p. 1). The approach taken by BAA can regarded as a watershed embracing the principles of lean construction and requiring a complete change in the mindset and culture of the participants. BAA expected a high degree of design evolution throughout the project so as to embrace new technological solutions to changes in security, facilities functionality or space requirements. The company realised that on such a complex project, early freezing of the design solution was not realistic. Rather, it had to rethink the client’s role and therefore decided to take the total risk of the contracts on the project. BAA thus introduced a system under which it actively managed the activities through the use of integrated teams who displayed the behaviours and values that could be likened to partnering. This strategy was implemented through the application of a T5 agreement under which the client takes on legal responsibility for the project’s risk. Ultimately, BAA envisaged that all suppliers involved in the project should operate as a virtual company (Cobra, 2006, p. 2).BAA also retained all financial risks of the project and created an incentivisation strategy that rewarded “best practice” suppliers. The organisation also invested heavily in the soft skills of communication and leadership so that the innovative approach applied could work well (Weaver, 2010). How the project was managed The management strategy in which BAA took responsibility of all the project’s legal risks created an environment in which all the team members involved were equal and problem solving and innovation were encouraged so as to drive out all needless costs, including litigation and claims, and perk up productivity levels (Cobra, 2006, p. 3). The success of the project can be attributed to long-term planning, design and construction phases. The planning phase was quite long, from 1986 to 2001 when the project was granted consent to proceed with construction (see figure 1). This phase included the longest public inquiry in United Kingdom planning history, which occurred between 1995 and 1999. The inquiry subjected the project to 700 restrictions, which included the diversion of two rivers to meet strict environmental regulations. It is as a result of this planning that the opening date of the project was set as 30 March 2008 and the project’s cost was projected to be £4.3 billion (Davies, Dodson & Gann, 2009, p. 15-16). Figure 1: T5 project life cycle Source: Davies, Dodson and Gann (2009, p. 15) The main design phase of the T5 project commenced in 1989, when Richard Rogers Partnership won a national competition to design new prestigious, iconic building with a 156 m single-span wavy roof and a glass façade. BA and BAA collaborated with architects and designers in a large integrated team to present an articulate conceptual design to the planning inquiry. Further work on the detailed design drawings continued into the construction phase of the project (Davies, Dodson & Gann, 2009, p. 19). The construction phase of T5 involved breaking the project down into two sub-phases: the development of infrastructure and buildings that occurred between July 2001 and March 2008, and the incorporation of systems and retail fit-out of the buildings, which took place from January 2006 to March 2008. BAA created a separate organisation to manage the T5 project. The organisation comprised about 300 experienced and highly skilled staff led by a small team of senior managers from BAA. BAA then divided the construction phase into four main activities namely buildings, rails, systems, and tunnels and infrastructure. The groups were in charge of 16 major projects and 147 sub-projects, with the smallest worth £1 million, and larger projects such as the £300 million extension of the Heathrow Express underground rail station (Davies, Dodson & Gann, 2009, p. 20). Finally, the operational integration phase involved a team of BA and BAA staff who worked for three years to ensure that systems, people and processes would be ready for the opening. The “start-finish” team took six months doing systems testing and operational trials prior to opening, which included 72 proving trial openings, each encompassing 2500 people to prepare systems, people and facilities for the public opening of T5 on 27th March 2008 (Davies, Dodson & Gann, 2009, p. 20). The details of how the T5 project was managed highlight the importance of meticulous planning to a project manager. There is no doubt that the perceived success of the project can be attributed to the detailed planning that took about 15 years. It can be said that this long period of planning enabled BAA to foresee future challenges and find solutions to them even before the construction process began. Importantly, the project was completed in time and within the stipulated budget and this emphasises the significance of careful planning. Critical analysis of the project outcome The outcome of the T5 project can be viewed from two perspectives. First is that it was a success because according to Cleland and Ireland (2004, p. 2), a project is deemed successful if its work packages and overall results have been accomplished on time and within the budget. This is true of T5 as the terminal was opened by HM Queen Elizabeth on 14th March 2008, and started operations on 27th March 2008 – some days before the planned date of 30th March 2008. The second view involves paying attention to the results of the project. Here, T5 was a disaster on the opening day. From the first day, flights had to be cancelled because the new state-of-the-art baggage handling system failed to perform as was planned. In addition, passengers were stranded, and over 15000 pieces of baggage were misplaced (Flouris & Lock, 2009, p. 1; Bourne, 2010, p. 3). From this view, the project can be regarded as not too successful on the first day, but this does not necessarily make it a failure. By looking strictly at the project timelines and budget, the project was a success because the requirements were met. This is supported by the fact that there was a meticulous plan and design, construction and integration phases. According to Flouris and Lock (2009, p. 27), a “failed” project such as the T5 “will eventually be viewed as successful if, many months or years later, the initial problems have been ironed out and largely forgotten and the facilities give good service to thousands of satisfied travellers.” Thus, in all respects, T5 remains a successful project for the reasons discussed so far because the technical hitches that occurred were corrected. Conclusion From the discussion about T5, it is evident that thorough planning is critical to the success of any project. The project manager has to take time to plan in order to address all issues that pertain to the project such as cost, time, health and environment concerns add so forth. This is true of T5 as the planning process took about 15 years before the construction was approved. It is also important to collaborate with many players in a project so that they contribute their input from different viewpoints. This is important to help avoid problems that would otherwise be overlooked if only one group were involved. In the T5 project, BAA collaborated with many contractors and this helped to streamline the project. However, it can also be noted that some issues are a likely to be overlooked even when meticulous planning is carried out. In this case, the first day of T5 was disastrous because some technical hitches that had not been anticipated arose. Therefore to avoid this, I would recommend that a project be tested thoroughly by all teams involved to ensure its success. This should involve training staff to adopt any new technology that comes with the project as it seems that this was not adequately done before the opening of T5. I would not be carried out by the feeling that new project abruptly becomes a culture, as it takes time for people to embrace a new idea and adapt to new systems. References Bourne, L 2010, “Why is stakeholder management so difficult?” Presented at Universidad EAN Bogota, Columbia, 22-24 September 2010. Cleland, D I & Ireland L R 2004, Project manager's portable handbook 2nd edn., McGraw-Hill Professional, New York. Cobra 2006, “The construction and building research conference of the Royal Institution of Chartered Surveyors,” Proceedings of the Annual Research Conference of the Royal Institution of Chartered Surveyors Held on Thursday 7th and Friday 8th September 2006 at University College London. Davies, A, Dodson, M & Gann, D 2009, “From iconic design to lost luggage: Innovation at Heathrow Terminal 5,” Paper Presented at the Summer Conference 2009 on Copenhagen Business School, Denmark, June 17-19 2009. Flouris, T G & Lock, D 2009, Managing aviation projects from concept to completion, Ashgate Publishing, Ltd., London. Health and Safety Executive 2005, “Heathrow Terminal 5 Project,” viewed 20 February 2011, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0CFwQFjAF&url=http%3A%2F%2Fwww.hse.gov.uk%2Fconstruction%2Fengagement%2Fheathrow.pdf&ei=jUpBT62KAoTf8APP7LylCA&usg=AFQjCNEWH8P0L6d6zhMdm7tIpxY_A_R6hA&sig2=Zq4J61QV7fgDefo2tt473A Imperial College London Business School 2009, “Heathrow Terminal 5: Innovation in project management,” viewed 20 February 2011, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CC4QFjAB&url=http%3A%2F%2Fworkspace.imperial.ac.uk%2Fbusiness-school%2Fpublic%2Fresearch%2FI_Egroup%2Fimpact-studies%2FIMP149_CS_Heathrow_08.pdf&ei=Bl9BT9LqAdHRsgb34vD4BA&usg=AFQjCNH4AY-3qETicTFxYPnxUF711sWXZA&sig2=x40_5_6ux_fJ4MGRhZDPhg Turner & Townsend 2011, “BAA - Terminal 5, Heathrow,” viewed 20 February 2011, http://www.turnerandtownsend.com/178/_1804.html Weaver, P 2010, “The effective management of time on mega projects: Why are there so many problems and how to solve them?” Presented at ICC 2010 Conference Challenges of Global Mega Projects Innovations & Creativities for Project Excellence, Legend Hotel, Kuala Lumpur 12th – 13th October 2010. 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